Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

The Financial Statements

Financial Accounting

1. Introduction to Accounting

The Financial Statements

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Multiple Choice

Which of the following items is reported on the income statement as an expense?

Common Stock

Accounts Receivable

Cost of Goods Sold

Retained Earnings

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Understand the purpose of the income statement: It reports a company's financial performance over a specific period, including revenues, expenses, and net income or loss.

Identify the nature of each item listed in the problem: Common Stock and Retained Earnings are equity accounts, while Accounts Receivable is an asset account. None of these are expenses.

Recognize that Cost of Goods Sold (COGS) is an expense: It represents the direct costs incurred to produce goods or services sold during the period.

Recall that expenses are reported on the income statement to calculate net income: COGS is subtracted from revenue to determine gross profit, which is a key component of the income statement.

Conclude that Cost of Goods Sold is the correct answer because it is the only item listed that qualifies as an expense reported on the income statement.